Suppose, you are interested in buying bond of a company named RTL Limited and the company is offering each of its newly issued $1,200 par value bonds at a price of $1,100. This is an annual bond that will pay coupons at the rate of 12% over its 12 years of maturity.

a. If your required rate of return from this investment is 14%, will you buy the bond at the offered price?

b. Will your decision change, if your required rate of return from this investment is changed to 12%?